Retailers accuse Amazon of violating foreign investment laws, write to DIPP secy objecting to the etailer's gift card promise.Jeff Bezos, Amazon’s founder and chief executive officer, sent offers of Rs 200 gift cards to millions of Indians earlier this month as part of a marketing gimmick that did not go down well with the country’s brick-and-mortar retailers who are crying foul.

The Retailers Association of India has complained to the government and accused Amazon of violating foreign investment laws by offering gift vouchers to its customers. The email sent on December 14 to celebrate the company’s journey in India was signed by none other than Bezos himself.

“Just two and a half years from our launch, Amazon.in has become the most visited e-commerce site in India. This customer response continues to amaze and energise us,” Bezos said in the email, which also contained data by comScore.

The data showed Amazon zipping ahead of rivals in India this year. “To celebrate and thank customers for their confidence in us, we are happy to announce an Amazon.in gift card of Rs 200 for all customers who shop on Amazon. in today.”

The retailers’ association, which filed a case in the Delhi High Court in May alleging that ecommerce firms were flouting the country’s FDI laws, objected to Bezos’ largesse. “Such transfer of ‘cash value’ to end-consumers, incentivising end-consumers to shop on a website – does this pass the test of B2B business transaction even when cash is directly being offered to retail customers?” the RAI asked in a letter on Saturday to Amitabh Kant, secretary in the Department of Industrial Policy & Promotion.

Amazon did not respond to an email seeking comment on the matter. India allows foreign capital in business-to-business, or B2B, e-commerce ventures but bars FDI in business-to-consumer, or B2C, e-commerce companies selling multi-branded products. Last month, India for the first time allowed online sales for entities that have permission to start single-brand retail outlets.

E-commerce companies, including Amazon and domestic rivals Flipkart and Snapdeal, say they operate on a marketplace model, where India allows 100% FDI, and that they only offer platforms for Indian retailers to trade.

“We have built a vibrant marketplace with tens of thousands of sellers offering everyday low prices on India’s largest selection of over 30 million products,” Bezos said in his e-mail. “We will keep growing our investments in India and continue to work hard for our Indian sellers and customers.”

Indian retailers contest such claims, saying that the marketplace is a sham model for sales by foreign online retailers. “Giving customers Rs 200 is what, if not retail?” asked a senior retail executive asking not to be identified.

Over the past several months, India’s brick-and-mortar retailers have intensified their attack on the rapidly growing e-commerce business in the country. Apart from the RAI, India’s shoe manufacturers and retailers have also taken the government to a Delhi court alleging FDI violations by online entities.

In November, the Delhi court ordered the Enforcement Directorate to probe the 21 e-commerce companies named in the petition to check if they had violated FDI rules.